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ACIM's crucial role in time of transition

ACIM, the Association of Car Importers - Malta, believes it has a "crucial role" to play in this time of transformation of the nation's status in view of preparation for membership of the European Union.

Jeffrey Mizzi, ACIM's president, last week told The Sunday Times: "We are trying very hard to maintain a certain amount of equilibrium in the marketplace and to ensure that there is a level playing field so that consumers get the required support in this, the second most important purchase of their lives. New car importers have been led by their foreign principals to provide a quality service; when customers buy a car from an ACIM member they know that the company has established local and international support systems in place.

"We are very worried that the car market is developing the same way as other sectors such as domestic appliances, electronic goods and computers, where the consumer no longer has a clear idea of who is to provide the after sales support.

"We are also worried at the lack of enforcement of the sales of vehicles taking place on the roadside, sometimes on Government land, with no planning permits, police permission, insurance, or anything."

ACIM represents all the 17 new car importing firms on the island, which collectively represent some 40 car makers around the world. It is run by open forum - members are welcome and encouraged to contribute to the discussions - and the presidency rotates among the members. Meetings, held twice a month, are well attended.

"This is an industry that has been a foundation stone of many large private enterprises in Malta, contributing directly and indirectly to several thousand jobs and the raising of millions of liri in import duties, licences and taxation - over Lm36 million in 1999," Mr Mizzi pointed out.

"We have contributed to the national economy through training, investment, premises, staff, and workshops. We are always competing against the back street garage that does not have half our overheads.

"Increasingly the laws of health and safety, the new Companies Act and changes in the VAT regime have put a strain on our organisations. When faced with an unregulated market the industry is looking to the authorities for guidance and the necessary enforcement required to guarantee an economic, level playing field for all concerned."

Asked whether car prices would go down should Malta opt for EU membership, Mr Mizzi said people have been given the impression that with the liberalisation of the EU car market, car prices are going to come down. In Malta we pay duties for non-EU goods, a first-time registration tax, and VAT.

Pre-tax prices have traditionally been among the cheapest in Europe. "In Malta we have the experience of 20 years of car assembly between 1960 and 1980, when locally produced cars paid a lower registration tariff," Mr Mizzi recalled. "The effect was to set a benchmark which other cars had to follow, and during this period importers managed to obtain the lowest pre-tax prices.

"In the eventuality of pre-tax harmonisation in Europe across the board, countries with higher prices like Germany and the UK will see lower prices, but these will be compensated for by countries with low pre-tax prices which will see price increases. These apparent increases will also be due in part to the transparency effect of the euro."

Malta has one of the most open car markets in Europe, with about 40 different brands from across the world being marketed. "Unlike other markets there are no quantitative, and up to now no qualitative restrictions on car imports except an exorbitant tax regime," he pointed out. "The local high tax regime has kept car prices at levels that, given Malta's relatively low per capita income, exclude many middle and low-income earners from the new car market."

"The tax on cars is changing in Europe, but traditional tax is by engine displacement," Mr Mizzi added, "The EU is more concerned with the impact of cars on the environment and safety. The large Northern markets are adopting an emission/power related tax.

"Carmakers are producing engines with the same displacement that produce either higher or lower power because of these taxes. There has to be a revision of our taxation."

Are there too many cars on Malta's roads and is there a limit on the number of cars we can import? Mr Mizzi said that recently there have been various references to total registration figures ranging from 260,000-300,000 vehicles on the road, depending on who is making the reference. This is misleading and calls for proper analysis. A portion of these cars are not paying annual registration fees. An equal amount are aged commercial vehicles. Over half are highly polluting "dirty engines" using leaded fuels.

"Mobility is a citizen's right and most Maltese need to decide on the form of transport that is in their best interests," he said. "Advances in car technology are reducing the damage cars do to the environment.

"The Government should be encouraging people to buy new cars rather than second-hand in order to take advantage of this new technology. An organised car scrapping programme should also be promoted.

"The present tax system and high new car prices encourage importation of second-hand imports, thereby increasing the number of old technology, polluting vehicles on our roads. In Japan the strict VRT means that cars older than three-five years are uneconomical to keep and run, and so are sold. Many of these end up in Malta. These cars do not have new Step 3 engines and produce more pollution than current new imports.

"In November the introduction of the Certificate of Conformity will ensure that new cars have to adhere to European standards. In order for this to be an effective measure these standards must be applied to all vehicles being imported."

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